What Should Investors Know About Tamarack Valley Energy Ltd’s (TSE:TVE) Earnings Trend?
In December 2018, Tamarack Valley Energy Ltd (TSE:TVE) released its most recent earnings announcement, which suggested that the company finally turned profitable after negative earnings on average over the last few years. Below is my commentary, albeit very simple and high-level, on how market analysts perceive Tamarack Valley Energy’s earnings growth trajectory over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Check out our latest analysis for Tamarack Valley Energy
Market analysts’ consensus outlook for the coming year seems pessimistic, with earnings declining by a double-digit -17%. However, the following year seems to show a complete contrast, with expected earnings growth rates arriving at a double digit 19% compared to today’s level, before plateauing off in 2022.
Although it is useful to understand the growth rate each year relative to today’s level, it may be more insightful determining the rate at which the earnings are moving every year, on average. The benefit of this method is that we can get a better picture of the direction of Tamarack Valley Energy’s earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To calculate this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 8.8%. This means that, we can anticipate Tamarack Valley Energy will grow its earnings by 8.8% every year for the next couple of years.
Next Steps:
For Tamarack Valley Energy, I’ve put together three essential factors you should further research:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is TVE worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether TVE is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of TVE? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
